Category Archives: keewatinrose archives

In yet another attempt to avoid public scrutiny, the Republican-controlled House of Representatives passed the Omnibus Tax Bill (HF 42) during the wee hours Wednesday morning. The Republicans do in fact have ample reason to be ashamed of the bill, for it contains onerous provisions that directly target the people of the Iron Range. One would pilfer $60 million from the Douglas J. Johnson Economic Protection Trust Fund, a business development fund that derives its revenue from the tax on production of taconite paid by the mining companies in lieu of property taxes. And apparently stealing Range property tax revenue isn’t enough for the Republicans, for another provision takes aim at reducing the taconite tax by freezing it at levels when the demand for steel was low. IRRRB Commissioner Tony Sertich estimates that the agency will lose approximately $20 million in the next biennium as a result, money that will not be available for economic development and diversification of the region’s economic base.

In other words, the Republicans are requiring just three percent of the state’s population to give up their property tax revenue and to disproportionately fund the state’s budget reductions while at the same time making a significant cut to that same revenue stream and guaranteeing the region’s major industry windfall profits as it removes a non-renewable resource.

Sounds reasonable.

The Iron Range Delegation sent the following letter to Governor Mark Dayton urging him to veto HF 42:

We the undersigned members of the Iron Range Delegation of the Minnesota Legislature, are writing to call your attention to the following provisions of the omnibus tax bill that punish the Iron Range.

First of all, the Republicans confiscated our local property tax by taking $60 million from the Taconite Economic Protection Fund. As you know, Article X Section 6 of or Constitution clearly states that taconite production taxes are in lieu of local property taxes. Secondly, they froze the escalator which was agreed upon with the mining industry at the time when taconite pellet prices are at an all time high. Governor, the mining companies’ profits are at record levels. Finally, they eliminated the small amount of money that we appropriated in statute for the Range Association of Municipalities and Schools (RAMS) and the Hockey Hall of Fame in Eveleth, both of which are very beneficial to the people of the Iron Range.

Clearly, Governor, the attacks by the Republican Majority on all the DFL areas of the state are an embarrassing way to govern and set a new low in public policy for the state of Minnesota.

We respectfully request that you veto the omnibus tax bill and ask that you mention our issues in your veto message.

Republican Rep. Carolyn McElfatrick of Grand Rapids is the only member of the Iron Range Delegation who did not sign the letter. McElfatrick did, however, previously join the Delegation in denouncing the raid on the DJJ fund.

On Tuesday’s edition of MPR’s Midday program, Governor Dayton clearly voiced his displeasure about the assault on the Iron Range’s economic development fund:

Congressman Chip Cravaack held what was supposed to have been his first town hall meeting on Minnesota’s Iron Range on Tuesday evening. But the event at the Mountain Iron Community Center more closely resembled a sales pitch for the Ryan Budget than a town hall meeting. Much like the snake oil salesmen of yore, Cravaack adroitly attempted to spin a tale of how his product would cure all that ails you.

Worried about the debt, Medicare, jobs, national security?

No problem. The Ryan budget gets us out of debt, makes Medicare solvent while maintaining benefits, creates 2.5 million jobs and makes us more secure from foreign threats, he promised with a crocodile smile.

Cravaack even came armed with the modern day shill, a power point presentation filled with manipulative phrases, colorful graphs and ‘official’ numbers. He slickly pimped the plan to the crowd, strictly adhering to Tea Party talking points.

The problem for Cravaack was that astute Iron Rangers weren’t buying what he was selling.

They came to discuss the actual facts, not as Cravaack stated “the facts to the best of my ability”. Forced to go off script, his snake oil salesman persona gave way to the proverbial deer caught in the headlights, unsure of what to do next. The numbers he cited for various aspects of the budget were particularly problematic for him. When challenged, Cravaack became increasingly confused and/or inconsistent as to the sources (originally stated to be the CBO), to the point where one participant from Ely noted with disgust “He has no idea where those numbers are coming from”.

Cravaack was unprepared for the questions from his constituents and even more surprised that he was unable to placate the crowd by simply repeating the phrases “I work for you”, “I won’t vote for anything that won’t protect seniors”, “It’s the best plan I’ve seen”. When confronted by the fact that his votes have indeed hurt his constituents or they don’t like what he’s doing, he talked about being in the military, about working for his constituents, or just babbled nonsense, prompting many comments in the audience about his ability to ‘sling the bs”. We don’t recall anyone getting a direct honest answer, not even well-respected former Eveleth legislator Joe Begich who raised some specific concerns about Medicare and pointed out that even Newt Gingrich came out against the Ryan budget.

The standing-room only crowd of approximately 125 was comprised of constituents from Nashwauk and Keewatin on the western part of the Mesabi Range to Eveleth on the east. There were people from International Falls, Ely, and Duluth in attendance as well. Quite an impressive turnout, especially with the price of gas hovering around $4.00 per gallon. Many, I dare say most, were not given an opportunity to be heard or to have their questions answered as the bulk of the time was used for the power point presentation.

It is very clear that Tea Party Chip had no intention of conducting a true town hall meeting where he listened to his constituents. It was merely his way of getting a captive audience to listen to his snake oil pitch for the Ryan budget. This was a bait and switch, plain and simple.

We deserve to be treated much better by our congressman. And he will hear us in 2012.

While Chip Cravaack was wooing the voters of northeastern Minnesota during the last election, he failed to mention that his brother is a sales executive with steel processor Hynes Industries of Ohio.

In fact, there is evidence that suggests that he deliberately hid the information from the voters. John Cravaack contributed to the campaign, yet the campaign did not disclose employer information on their FEC financial report, instead listing “information requested”. It seems odd that a campaign that Cravaack repeatedly espoused as a small, tightly knit, military-style operation would not be able to provide employer information for the brother of the candidate.

Even more troubling is that John Cravaack also serves as a director of the Metals Service Center Institute, a trade association that “supports and represents the interests of metals users”.

The policy agenda of the Metals Service Center Institute is chilling:

The Metals Service Center Institute’s government affairs efforts focus on legislation and regulation that impact the cost and competitiveness of North American manufacturing, and particularly, producers and distributors of carbon steel, stainless steel and aluminum in North America.

We support legislation, tax policies and regulations that lower the costs of doing business and encourage free enterprise.

We supported the extension of the Bush-era tax cut extension, see a Deloitte analysis of the legislation.

We oppose the repeal of the LIFO accounting method. Repeal would create tax liabilities that could devastate service centers, producers and their customers.

We oppose the Schumer – Van Hollen DISCLOSE Act , H.R. 5175/S. 3295. This legislation would limit corporate political speech and our constitutional right to influence elections and advocacy campaigns. The bill targets corporations while continuing to allow unions to spend hundreds of millions to support candidates who are not sympathetic to business issues.

We support free and fair trade, which means enactment and enforcement of trade laws that combat illegal subsidies, manipulated currencies and all other mercantilist policies.

We support the Currency Reform for Fair Trade Act of 2009, S. 1027/H.R. 2378. This legislation would provide relief for U.S. manufacturers impacted by currency manipulation and its export subsidy effects.

We support labor laws and policies that encourage profitability, opportunities for personal advancement, safety, and workforce development.

We oppose the Employee Free Choice Act in any form. In addition to its elimination of the secret ballot in union elections, we oppose these other provisions:
• Binding arbitration,
• Limits on corporate communication efforts during organizing campaigns,
• Any form of a “quick election”, and
• Increased penalties for corporations without increased fines for similar union activities.

We support energy policies that protect our environment, create reliable domestic energy supplies and work to ensure that North American manufacturers don’t leave for countries with limited or no regulations.

We support regulations that would lead to a cleaner environment that are multiparty and commonly adopted by the entire world community.

We oppose the Waxman – Markey Cap and Trade legislation and its unilateral regulation of U.S. industry.

We oppose the EPA regulation of green house gases (GHGs) under the provisions of the Clean Air

Is it just a coincidence that Cravaack’s statements during the campaign match the policy statements of the steel industry? And did he hide the information because he knew having ties to the steel industry would not go over well on the Iron Range?

The most important question is exactly whose interests is Chip Cravaack going to represent in Congress – those of the steel industry, which also benefits his family, or his constituents in northeastern Minnesota?

Wasn’t it nice when we were represented by Jim Oberstar and we knew where our congressman stood?

Update: The Cravaack Campaign added employer information for John Cravaack to their FEC report in response to this story.

There is more than just passenger air service to rural airports at stake in the impasse between the U.S. House and Senate over the FAA extension bill. In fact, the major stumbling block centers around the ability of airline and railroad workers to unionize.

Section 903 of the House version of the FAA Air Transportation Modernization and Safety Improvement Act (HR 658) repeals a rule adopted by the National Mediation Board earlier this year that would make union representation elections for workers covered under the Railway Labor Act more fair. Under the new rule, elections are decided by the majority of votes cast,the standard procedure in democratic elections. Previously, the non-votes of all eligible voters were considered ‘no’ votes. Democrats strenuously objected to the inclusion of the repealer.

Rep Nick Rahall (D-WV):

A provision overturning that rule simply has no business being in this pending legislation. It has nothing to do with safety, nothing to do with improving our air transportation system and it has nothing to do with making air service more efficient

Rep Jerry Costello (D-IL) introduced an amendment during the 16 February markup to strike it from the bill:

Section 903 is a poison pill that will kill the FAA bill and must be taken out in order to pass the Senate and be signed by the President.

I would have to respectfully disagree with this amendment. In the process of looking back we have to remind my colleagues here that we’ve had 75 years of history in this unionization, I doubt anyone in this room thinks that there are too many unions. So my opinion is, that being a union member myself, if we want to organize a union within a property we can do that, but we have to ensure that everyone on that property is engaged in ensuring that union becomes part, on that property. So I urge my colleagues to not support this amendment because as, as a union member if you have small group of activist union members that manage to place a union in place in an organization you’re going to have disharmony within in that organization if the other parts of that body feel that they’ve been left out in the process. So I urge my colleagues to vote against this amendment.

The Costello amendment narrowly failed by a vote of 29 – 30, with Cravaack voting against organized labor. The bill was subsequently passed out of committee, 34 -25. Cravaack, of course, voted for it.

On 31 March, the Democrats tried once again to remove the onerous provision from the bill by enlisting the help of Rep. Steven LaTourette of Ohio, the lone voice of reason in the Republican caucus. LaTourette introduced an amendment on the House floor to strike section 903 from the bill:

Let me just make this observation. This is the 17th extension, I believe, of the FAA bill. We haven’t had an FAA bill since 2003, and this is going to take it to two more years because the President said he won’t sign this bill unless this amendment is adopted. The Senate has declared this a nonstarter; and so if we want to give fancy speeches, and for those just tuning in around the country, welcome to whack the union night because this will be a fourth, fifth anti-union vote that has nothing to do with the aviation system.

The amendment failed on a 206 – 220 vote, with Cravaack again voting against removal of the anti-union language.

The Transportation bill came up for final passage in the House on 1 April. Cravaack spoke against a motion to recommit (send back to committee). The motion failed and the bill passed by vote of 223 – 196, with the anti-union language intact. Chip Cravaack voted yes.

The Senate refused to concur with the language and appointed a conference committee to hammer out differences with the House. The House still has not appointed any conferees.

With the current authorization set to expire on 22 July, a lights on bill was needed to keep the FAA fully operational. The Senate wanted a clean FAA extension, but the House insisted on including a controversial provision that would remove 13 rural airports from the Essential Air Services program.

The House took up the extension bill on 20 July. Again, Chip Cravaack (chair of the EAS work group) spoke against a motion to recommit, urging support for the extension. And again the motion was defeated and the extension passed 243-177, with Cravaack voting yes along with his Tea Party colleagues.

Sen. Jay Rockefeller (D-WV),chair of the Senate Commerce, Science and Transportation Committee, blasted the House action:

The House passed an FAA extension that, unlike the twenty previous FAA extensions, included changes to FAA policy that have not been agreed to in both chambers….This House bill was developed in a partisan manner. It had a number of problematic provisions added during floor consideration. Central to these was a decision to include language that would reverse a National Mediation Board (NMB) decision from the previous year. The NMB provision was so tainted it passed by just seven votes in the House. Consideration of the final FAA package passed in the House by a party line vote of 223-to-196.

The Washington Post reports:

Rockefeller accused Mica of including the rural airport provision in the extension bill in retaliation for the Senate’s refusal to accept the labor provision. “Your attempt to punish the Senate by hurting small-community air service has backfired. This language only guarantees that the Senate will reject the FAA extension,” Rockefeller said in a letter sent to Mica on Tuesday. Mica didn’t deny that, saying it was a message to the Senate that “we want this finally resolved.

Despite their assertions to the contrary, the House Republicans have done nothing to negotiate with the Senate, have shown no indication of striking the anti-labor language from the bill and it appears they are not willing to compromise on the EAS program as well: a staff person in Rep. Mica’s office confirmed that the EAS workgroup has not met for three months. This is a classic example of the brinksmanship strategy that the Tea Party has employed throughout the nation.

Rep. John Mica (R-FL), chairman of the House Transportation and Infrastructure Committee made their intentions clear in his opening statement of the markup:

It has become quite clear that Rep. Chip Cravaack has no problem with eliminating passenger air service to Range Regional Airport, International Falls and hundreds of other rural airports around the United States. But it is rather surprising that Cravaack is so determined to gut the Essential Air Services (EAS) program that he voted with his fellow Tea Party members to shut down the FAA.

We reported earlier that Cravaack co-sponsored the FAA Reauthorization and Reform Act of 2011 which repeals the EAS Program, except in Alaska and Hawaii, on October 1, 2013. It also makes cuts to the Airport Improvement Program (AIP) that small airports rely on to make improvements to infrastructure and to address safety and security needs. The bill passed the House on April 1 by a vote of 223 -196, the narrowest margin for an FAA reauthorization bill in 30 years.

Fortunately, funding for the programs remained intact in the Senate bill and the Senate refused to concur with the House language.

With the current authorization set to expire at midnight on Friday, July 22, passage of an extension of funding for the FAA was required in order to keep the agency running.

The Aerospace Industries Association sent a letter urging Congress to pass a reauthorization extension:

… Failure to extend authorization would have dire operational and economic consequences. Among the immediate impacts to FAA are:

Lost revenue to the Trust Fund of approximately $200 million per week

The furlough of about 4,000 non-essential FAA employees not funded through the operations account

Delays in implementing the Next Generation Air Transportation System, which a recent Deloitte report says will generate $29 billion per year in U.S. economic benefits and eliminate 29 million metric tons of carbon emissions when the system is fully implemented

In addition, according to Transportation Secretary Ray LaHood:

… the government will lose about $200 million a week in airline ticket taxes and $2.5 billion in airport construction projects will come to a halt if the Federal Aviation Administration is forced to shut down.

On Wednesday, the House extension (H.R. 2553) came up for debate. Because the Senate indicated that they would not accept the House language, Rep. Jerry Costello (D-IL), ranking member on the aviation subcommittee, introduced a motion to recommit (send back to committee). Chip Cravaack spoke against the motion and urged passage of the extension, which was opposed by organized labor.

Cravaack, with the assistance of his Tea Party co-horts, succeeded in voting down the motion and passed the bill, sealing the fate of the FAA and that of thousands of workers who will lose their source of income.

Chip Cravaack campaigned on a promise to foster economic development while focusing on “needs rather than wants”. It is shocking to learn that Congressman Cravaack considers the only airport serving the Iron Range region as a want rather than a need and fails to recognize the importance that passenger air service plays in driving economic development.

The FAA Reauthorization and Reform Act of 2011, of which Cravaack is a co-sponsor, contains provisions that are devastating to rural airports, including the Range Regional Airport in Hibbing. The bill repeals the Essential Air Services (EAS) Program, except in Alaska and Hawaii, on October 1, 2013. It also makes cuts to the Airport Improvement Program (AIP) that small airports rely on to make improvements to infrastructure and to address safety and security needs.

The airline industry was deregulated in 1978. As a result, airlines were able to drop service to areas that were less populated and more expensive to serve. The EAS program was enacted to ensure continuing airline service to rural communities by providing subsidies to commuter airlines. There are three airports in Minnesota that receive EAS subsidies: Thief River Falls (CD7), International Falls (CD8), and Range Regional Airport (CD8).

The Range Regional Airport currently receives a $2.9 million EAS subsidy, providing the area with three flights daily Monday through Friday and two on Saturday and Sunday. There is little doubt that without the subsidies Delta will terminate air service to Hibbing. The loss of our only air carrier would be devastating to the economy of our region, hurting two of our largest industries – tourism and mining. Airline service provides a vital connection with the global marketplace. It is of particular significance as the construction of Minnesota’s first steel plant is now underway by Essar Steel of India and as other regional businesses are seeking new markets and new partnerships. And loss of passenger airline service to the region would make it very difficult to attract new industries to the area, a critical step as we continue to look for ways to diversify our economy in preparation for the day when our minerals are gone.

Throughout the committee process, Cravaack repeatedly harped on needing to be more careful with spending taxpayer dollars, citing the federal budget. Yet the money for these programs does not come from the taxpayers, something he would be aware of if he had bothered to read the background memo provided to aviation subcommittee members by Rep. John Mica, chair of the House Transportation and Infrastructure Committee. Money for the subsidies comes from the Airport and Airway Trust Fund, which is funded only by aviation users. In fact, eliminating the EAS program would have absolutely no effect on the federal budget whatsoever.

The unified message from the industry is that elimination of the EAS program and cuts to the AIP(representing a rollback to 2008 levels) significantly compromises passenger safety and severely cripples the ability of airports to make infrastructure improvements to meet safety and Homeland Security requirements.

It is surprising that Cravaack, a member of the House Committee on Homeland Security who frequently cites his former job as an airline pilot, would co-sponsor legislation that so significantly threatens passenger safety and security.

Even more astounding is that although Cravaack is perfectly comfortable breaking the agreement with rural airports in America, he felt it important to keep the agreement to fund foreign airports. Indeed, Malaysia Chip was careful to continue funding under the AIP to Midway Island, Palau, Micronesia and the Marshall Islands through 2014.

The elimination of the EAS program is viewed as devastating to economic development throughout the nation, as well as the Iron Range. The presidents of the Regional Airline Association, National Association of State Aviation Officials, American Association of Airport Executives,and Airports Council International – North America addressed this issue in a letter opposing cuts to the AIP and elimination of the EAS sent to the House Transportation Committee:

…Cutting EAS would serve as a deathblow to the economic health of hundreds of small communities across the nation… The loss of commercial air service at these communities would likewise crush existing businesses and would cause even greater numbers of doctors and other skilled professionals (already in short supply in rural areas) to migrate to less isolated communities… Of the 435 commercial airports outside of Alaska and Hawaii, 106 of those airports receive air service only through the EAS program. Elimination of the program at those airports would shut down air travel to and from nearly one quarter of our nation’s commercial airports. The economic impact on our nations air transportation network, which provides more than 10.9 million direct us jobs and serves over 750 million passengers annually, would be substantial. Moreover, eliminating the program also eliminates the jobs of thousands of employees of those airports and the airlines serving them.

Shaun Germoulais, director of the Range Regional Airport, made a seven-hour round trip in February to meet with Cravaack at his office in North Branch. He explained the impact this legislation would have on the Range Regional Airport, including the loss of passenger air service, and the subsequent impact on region’s economy.

Germoulais had this to say in response to Congressman Cravaack’s subsequent vote for the bill:

I am disappointed with any vote that will not support the Essential Air Service Program (EAS) and reduces the Airport Improvement Program which enhances safety and efficiency at our Nation’s airports. These programs are funded through the Airport Trust Fund established by the Federal Government years ago. The funds are derived from user’s fees such as taxes on aircraft sales, aircraft fuels and airline tickets. If you are not utilizing the system you are not directly supporting these programs. Therefore, reducing what can be spent from the Aviation Trust Fund has no effect on the national deficit or savings to the general tax paying citizen. It does, however, reduce spending required by airports to update safety, security and infrastructure projects, not to mention loss of jobs when those projects are not being accomplished.

The loss of the EAS Program would be devastating for rural communities. Without the annual subsidy, most commercial airlines would exit these airports. If that would occur at the Range Regional Airport, 25-30 jobs would be in jeopardy. Approximately 32% of the airport’s annual revenue used to offset operating expenses would be lost. Local travelers would spend more money driving and incurring additional expenses at other airports. And most importantly, it places a hardship on rural communities trying to retain businesses and a competitive disadvantage when attracting new business.

Was Chip sleeping during all of the testimony from aviation experts? Did he also sleep through the meeting with Germoulais? And is he unable to grasp the simple concept that the money for the program comes from the aviation trust fund and not the taxpayers?

Perhaps if Cravaack spent more time in the 8th district instead of fundraising in Minneapolis, he would recognize the importance of passenger air service to the Iron Range region.

And this is legislation that Cravaack didn’t just support, but co-sponsored and repeatedly approved. First he voted to pass this out of the aviation subcommittee. Then he voted to pass it out of full committee. Chip voted for it a third time on the House floor on April 1. This is not just a misunderstanding. Cravaack’s intent is quite clear: he wants to be sure this program is gone and our air service along with it.

Cravaack campaigned on a promise to listen to his constituents. Well, Chip, we’re telling you we need to keep passenger air service to our airport. It is critical in our attempt diversify our economy. You seem to be doing a good job of representing the people of Micronesia, Palau, Midway Island and the Marshall Islands…now how about the people of the Iron Range?